Coffee Market Report
It is the early stages of the October 2024 to September 2025 new crop harvest season for Colombia, Central America and Mexico coffee producers, where quality washed coffee harvests are soon to pick up pace. This while the seasonal hurricane season in the Gulf of Mexico historically comes to an end in November, with the latest hurricane, Oscar dissipating over the Bahamas, one might anticipate further storms to form over the next few weeks to bring along spells of heavy winds and rainfall. The weather within this largest quality washed arabica producer bloc which accounts for an average 70% washed arabica production, is for the most part experiencing conducive weather conditions for harvesting activities to take place. There continues to be concerns regarding the availability and affordability of labour for the upcoming harvests, exacerbated by a growing trend of migration to the north.
The markets continue to wait in anticipation of the European Union’s parliamentary vote on the potential for an official delay decision and the European Union's Deforestation Regulation (EUDR), which was initially set to be enforced end December 2024. This delay decision has been confirmed by the European Council but awaits final approval, that will be voted by EU Parliament mid November 2024. Should the vote be in favour of a delay to the implantation of EUDR, the new implementation date will be 30th December 2025.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 9,551 bags yesterday, to register these stocks at 839,910 bags, with 98.01% of these certified stocks held in Europe at a total of 823,136 and the remaining 1.99% being held in the USA at a total 16,774 Bags. Of this, a total 396,958, or 46.26% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.89% of these certified coffees, from Nicaragua. The pending grading stocks were seen to increase by 3,840 bags on the day, to register 98,244 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 49.03 Usc/Lb. This equates to 19.43% price discount for the London robusta coffee.
It was a mixed but overall softer day on the commodity markets yesterday, with the US Dollar firming by 0.40% against a basket of other currencies, a firmer Dollar is traditionally seen to be a bearish factor for commodities traded in other currencies. The New York Arabica Coffee, Corn, Sugar, Soybean and Wheat markets ended the day on a firm note, while the Londo Robusta Coffee, Cocoa, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.292 Sterling, at 1.079 the Euro and with the US Dollar buying 5.690 Brazil Real.
The New York and London markets started the day yesterday trading on firmer notes respectively, making gains during the morning session to see both the New York and London markets set a new high for the day’s session early in the day. The late morning session saw the markets drop back from the early highs as there was a degree of selling pressure seen to weigh the markets lower. As the afternoon progressed, the New York and London markets traded back through par, albeit under light volumes of trade, to set a narrow range for the day. The New York market rebounded from the lows of the day to gain support for the remainder of the session and see the market settle on a modest firmer note with more than half of the earlier gains of the day intact. The London market recovered from the lows of the session to trend firmer towards the close. The market was seen to settle on a modest near to unchanged firmer note at the close, recovering most of the earlier losses of the day.
The London market ended the day on a modest near to unchanged negative note with 6.76% of the earlier losses of the day intact, while the New York market ended on a positive note, with 62.50% of the earlier gains of the day intact. This mixed close for the markets, with the London market recovering most of the earlier losses to settle near on a modest softer note and the New York market settling on a modest firmer note, might inspire some degree of follow through support to possibly see the markets set for a steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 4482 – 5 DEC 252.35 + 2.50
JAN 4443 + 18 MAR 251.05 + 2.30
MAR 4357 + 22 MAY 249.55, + 2.35
MAY 4283 + 20 JUL 246.80 + 2.40
JUL 4201 + 21 SEP 243.20 + 2.35
SEP 4128 + 22 DEC 237.40 + 2.30
NOV 4062 + 32 MAR 232.45 + 2.25
JAN 3985 + 35 MAY 228.25 + 2.10
